Digital economy contributed P1.9T to GDP in 2021

THE DIGITAL ECONOMY contributed 9.6% to the country’s gross domestic product (GDP), an equivalent of P1.87 trillion in 2021, according to the Philippine Statistics Authority (PSA).

PSA data showed the digital economy in absolute terms grew by 7.8% or P134.754 billion last year from P1.735 trillion in 2020.

The country’s digital transactions have yet to recover to the pre-pandemic level of P1.955 trillion in 2019.

As a percentage of GDP, the digital economy has been on a decline since 2018 when it stood at 10.1%. It dipped to 10% in 2019 and dropped to 9.7% in 2020.

According to the PSA, the digital economy covers digital transactions such as e-commerce and online media/content.

The sector’s gross value-added (GVA) expanded by 7.8%, a reversal of the 11.3% contraction in 2020, and higher than the 6.1% GVA growth in 2019.

All sub-components posted growth, reversing the decline seen in 2020. Digital media and content grew by 10.3%, from a 10.8% contraction in 2020. E-commerce rose by 8.2% (-31.4% in 2020), while digital-enabling infrastructure expanded by 7.6% (-5.2% in 2020).

Digital-enabling infrastructure contributed 79.6% or P1.488 trillion to the economy, slightly lower than the 79.7% share in 2020. This sub-component covers computers, electronic products, telecommunications services, among others.

E-commerce’s share to the economy was unchanged at 17.6% (P329.675 billion) in 2021, while digital media/content’s share stood at 2.8% (P51.473 billion), up from 2.7% in 2020.

PSA data showed an 11.6% rise in the number of Filipinos employed in the digital economy to 5.59 million in 2021, from 5.01 million in 2020.

Broken down, 77% or 4.3 million were employed by companies involved in digital-enabling infrastructure, followed by e-commerce with 20.7% or 1.157 million, and digital media/content with 2.4% or 135,486.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the return to office of many workers may have partly contributed to the dip in the digital economy last year.

“I think it did play a role. Nevertheless, the difference is marginal and that people will continue to go digital in a lot of ways,” he said in a Viber message.

In the latest e-Conomy Southeast Asia Report 2022 by Google, Temasek, and Bain & Co., the Philippines’ digital economy is seen to reach a gross merchandise value (GMV) of $35 billion by 2025, from $20 billion this year.

The country’s overall digital economy is expected to hit a GMV of $100-150 billion by 2030, according to the report. 

“As long as the economy will robustly grow and grow higher than historical average (6%), I believe the projected growth are within reach. There seem to be an economic slowdown next year, but succeeding years may see the economy going back to average growth,” Mr. Asuncion said. — Bernadette Therese M. Gadon